In a post published on 30th September on his personal blog, Vitalik Buterin addressed some very sensitive issues, the main topic being the future of Ethereum.

In his speech, we find reflections on the challenges and opportunities facing the Ethereum community, especially in the areas of ZK-EVM rollups, liquid staking and private mempools.

The gist of the discussion can be summed up in a very precise question that Vitalik posed at the beginning of his blog: does it make sense to add more functionality to the protocol or is it better to aim for a minimalist structure?

Observing the changes in the blockchain landscape over the last few years, Vitalik has come up with 5 important lessons that reflect the modus operandi with which this question should be approached, and which we should all take inspiration from.

Let’s look at the details together.

Vitalik Buterin and philosophical reflections on Ethereum’s past and future

Vitalik Buterin, a prominent figure in the world of blockchain, published a post on his personal blog a few days ago in which he discusses some philosophical topics about the future of Ethereum and its community.

The founder of the world’s most famous smart contract development platform began the post by reflecting on the priorities the protocol set for itself in its early years, which now seem to have changed with the evolution of society and the entire decentralised ecosystem on which Ethereum orbits.

In fact, in the beginning, the ultimate goal of his blockchain was to make the backbone as simple as possible and to make the maximum effort to build as many applications on top of it as possible.

In 2013, Vitalik and his initial team’s idea was to build a virtual machine that would be operated through a blockchain check, which would essentially result in a call to the machine itself.

In recent years, however, there has been a strong interest in the community to include as much functionality as possible in the main protocol, without leaving it to the rest of the world to solve the challenges that have arisen over the years.

Among these, we now find narratives that focus more on the mere issue of scalability that has always plagued Ethereum’s global computer, but we also find user needs that range from the simple exchange of digital resources to issues of privacy, account security, resistance to censorship and even advanced cryptography.

The basic question that Vitalik Buterin poses in the published text is therefore this:

Should the Ethereum protocol include more features?

Let us try to be more specific by reporting Vitalik’s thoughts on Zk-EVM rollups, private mempools and liquid staking.

Should Ethereum build more functionality into the protocol? The challenge of ZK-EVM rollups

Looking at each of Vitalik Buterin’s thoughts on the future of Ethereum and whether or not the protocol structure should be enshrined by adding or removing functionality, we can see the following.

Starting with the topic of ZK EVM rollups, which are increasingly present as L1 scaling structures that use off-chain computation tests to offload the main chain, Vitalik addresses the controversy surrounding the possibility of running into bugs in ZK code.

In fact, many ZK projects have a “safety board” that can be consulted in the event of bugs in the test systems. The doubt concerns how these roll-up networks should handle the level of trust in the test systems and in the safety board.

The way forward seems to be to give less and less power to these bodies, which are made up of people who think outside the blockchain information.

There are plans to start supporting “quasi-EVM” versions with custom code tested by other systems, which can act as a hybrid for these complications.

In conclusion, the consecration of ZK EVMs holds both promise and challenges: for now, the underlying technology is immature and requires exceptional human control.

More complex designs could be added as the technology develops.

Private Mempools and Liquid Staking

Let’s turn to the topic of private mempools: With the increasing notoriety of MEV bots on Ethereum, Vitalik Buterin and the entire community started thinking about alternative solutions to avoid the damage caused by attacks such as frontrunning transactions.

As the pools are currently public and visible to everyone, an MEV can easily be ‘corrupted’ by paying more fees than necessary and choosing the order in which it wants the Tx to be executed in order to gain financial advantage at the expense of the end user.

To solve this problem (which actually also has benefits for DEXs, such as lower price spreads and stability of lending protocols), some developers have come up with a kind of private mempool that can keep users’ transactions encrypted until they are added to a blockchain, thus reducing the profit opportunities for MEVs.

The problem, however, is that such schemes require a special kind of encryption: which, to put it simply, must be self-decrypting once the transaction is actually irrevocably accepted.

Unfortunately, there is no single solution that is reliable enough to be practically accepted at Layer 1. 

Therefore, consecrating anti-frontrunning functionality at layer 1 seems a difficult proposition, at least until delayed encryption is perfected. Again, the complexity of Ethereum’s structure is viewed positively, but we still need time and compromises.

Finally, on the liquid stakes front, Vitalik Buterin’s thoughts are related to the risk of future centralisation that Ethereum could suffer from given the growth of certain protocols such as Lido and RocketPool.

In the short term, the most immediate solution is to convince the community to use a variety of providers so that no single entity gets too big.

The experiment has already failed, as several providers have appealed to stakers, without success, trying to eliminate part of Lido’s marketshare, which to date amounts to 32%.

Since moral pressure has not worked, Vitalik leaves the door open to the simple creation of a fungible ETH staking token in the protocol, possession of which would grant governance access to choose who manages the nodes.

There are actually other, more complex ways to address the risk of centralisation of the system, such as committees of random depositors voting off-chain to decide the management of nodes, but this would undermine the concept of collective power.

As ideas and concerns about this sensitive issue grow, Vitalik concludes by simply saying that the way forward is not all black or all white, but that there is the possibility of “sanctioning some things and leaving other things to the users”.

Vitalik Buterin’s 5 conclusions from his reflections on the future of Ethereum

At the end of his post, Vitalik Buterin draws some conclusions based on his previous observations about the future of Ethereum and the doubts about whether or not to include as much functionality as possible in the protocol.

Below we summarise 5 interesting lines of thought from Vitalik:

1- In order to understand whether the consecration is right or not, it is necessary to be aware of the fact that blockchains are social systems and not personal computing platforms.

Thinking along these lines can help to provide answers to the challenges that arise in the future.

2- Consecration of functions can help avoid the risks of centralisation in other parts of the stack. However, too much consecration can strain the trust and governance of the protocol and compromise Ethereum’s neutrality.

3- A cross between minimal consecration and full consecration of all functionalities may be the right way forward as the technology evolves. This is especially true for liquid staking.

4- Dedication may prove counterproductive in the long run, as user needs are unpredictable. Features that we consider essential today may not be widely used in the years to come.

5- It could be highly beneficial to simplify or even eliminate certain functionalities, such as pre-calculations that optimise contracts to save time and gas prices.